COVID-19 Government Stimulus Update – March 2020

In March 2020, the Australian Government released its economic response to the coronavirus (COVID-19). The ATO also released a series of administrative concessions for taxpayers we think could be of benefit to you:

Tax incentives for business investment

Instant asset write-off increased

  • For new or second-hand assets first used or installed ready for use from 12 March until 30 June 2020
  • The instant asset write-off threshold will be increased from $30,000 to $150,000 for businesses with aggregated annual turnover of less than $500 million (up from the current $50 million threshold).

The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets.

  • The threshold will revert to $1,000 for small businesses (turnover less than $10 million) from 1 July 2020, however businesses not entitled to the instant asset write off from 1 July 2020 may be entitled to the 50% investment incentive as below.

Backing business investment incentive

The Government is introducing a time limited 15 month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by accelerating depreciation deductions.

  • Businesses with aggregated annual turnover of less than $500 million per annum will be able to deduct 50 per cent of the cost of an eligible asset upon installation, provided it was acquired after 12 March 2020 and first used or installed by 30 June 2021.
  • There is no asset value threshold for this 50% investment incentive.
  • Existing depreciation rules applying to the balance of the asset’s cost.

Cash flow assistance for businesses

Boosting cash flow for employers

Up to a $50,000 tax-free payment to small and medium-sized businesses with aggregated annual turnover of less than $50 million that employ workers, between 1 January 2020 and 30 June 2020. These eligible businesses will receive a payment equal to 100% of their PAYG withheld, delivered as a credit in their BAS from March to June 2020, with a minimum $20,000 payment and up to a cap of $50,000.

Businesses can alos apply a further amount upto $50,000 for the wage provisions during the July-October 2020 period.

Making a total of up to $100,000 claimable.

Click below to get in contact with a team member who can assist you and your business

Stimulus Example 1Stimulus Example 2
Stimulus Example 3